New York Court Holds That Privileged Statement to Insurer May be Discoverable

Generally, under New York law, a statement by an insured given to a liability insurer as part of its claim investigation is protected from disclosure as material prepared solely for litigation. Recently, the New York State Appellate Division, Third Department held that this protection applied to a statement provided by an insured in the context of a personal injury claim against the insured, but held that the privilege may have been waived if the insured voluntarily provided the statement to the claimant. See Curci v. Foley, ___ A.D.2d 2017 ___, NY Slip Op 03100 (3d Dep’t April 20, 2017).

In Curci, Daniel and Tiffany Curci sued Thomas Foley, Tiffany Curci’s father, for injuries Daniel Curci suffered to his hand while working with a log splitter on Foley’s property. In his answer to the complaint, Foley denied that he owned the log splitter. The Curcis demanded that Foley produce a copy of an audio recording of Foley’s statement to his insurer admitting he owned the log splitter. The Curcis knew of the audio recording because Foley allegedly had given a transcript of his statement to the Curcis.

Foley claimed the statement was recorded as part of the insurer’s claims process in preparation for litigation (and thus was protected from disclosure), and Foley denied that he gave the statement to the Curcis. The Curcis moved to compel disclosure of the recording, and the Supreme Court, Ulster County granted the motion, holding that Foley did not demonstrate the statement was made in preparation for litigation. Further, the Court held that even if the material was privileged, Foley waived the privilege by giving the transcript to the Curcis.

On appeal, the Appellate Division, Third Department reversed, holding that an audio recording of a conversation between Foley and his insurer was privileged because the statement was recorded in anticipation of litigation. The Court stated that a conditional immunity, or privilege, applied to the insurer’s file, including the insured’s statement, due to the nature of the claims process. However, the Court noted that whether Foley waived the privilege by giving the Curcis a transcript of the recording required a factual hearing because the parties disputed how the Curcis came into possession of the transcript.

The Curci decision is a reminder to liability insurers and defense attorneys to take precautions to ensure materials prepared solely for litigation purposes are protected from disclosure. Although the Court in Curci held that the fact that an insurer provides a copy of an insured’s statement to the insured does not amount to a lack of due diligence or waiver of the privilege, an insured who voluntarily gives such a statement to a third party, such as a claimant, may waive the privilege.

This Legal Alert was authored by Stacy A. Marris, who recently joined Barclay Damon’s Rochester office as an associate in the Insurance Coverage & Regulation Practice Area. During law school, Ms. Marris was a lead articles editor and an author for the Syracuse Journal of Science and Technology Law. She is a graduate of Hamilton College, Syracuse University S.I. Newhouse School of Public Communications, and Syracuse University College of Law.